MILLINOCKET, Maine — Town officials are doing all they can to help the business interests of a New Hampshire investment firm in hopes that its proposed $140 million pellet mill will break ground this year, they said Friday.
Cate Street Capital Inc. and two corporate entities it created when it bought the Katahdin Avenue paper mill in 2011 — GNP Holdings II and GNP West Inc. — have been granted a tax abatement of about $356,541 for this year. They originally sought an abatement of $1.23 million, Town Manager Peggy Daigle said. Town officials have released liens from the corporations’ 24 town properties in acknowledgement of a $120,000 payment that squares last year’s taxes.
The three corporations still owe about $1 million in taxes that were due Jan. 20, but Daigle expressed cautious optimism that the recent payment signaled progress. Cate Street’s proposed pellet mill at GNP’s Katahdin Avenue industrial park is projected to create 55 jobs directly, 281 indirectly and produce 300,000 tons of biofuel pellets annually for distribution to overseas electricity plants.
“I think it’s a perfect development for that site. It takes advantage of the wood basket, keeps people working and puts out a product that will probably do quite well in the market,” Daigle said Friday. “Every time they make a payment, it is good news. It has been a long road for them and people have been skeptical that we would get [any payment of overdue taxes]. I think this [most recent payment] sends a message that maybe we need to be patient.”
Cate Street’s Thermogen Industries is developing the pellet mill. It would use a thermal-steam process commonly employed in several industries, including wood pulp manufacturing.
Company officials that town leaders met with in mid-January said they would pay their 2014-15 taxes soon. They also said they are “moving toward having an announcement soon” regarding the Thermogen project’s status. The announcement should come in late March or early April, Daigle said.
Cate Street spokeswoman Alexandra Ritchie did not return requests for comment on Friday.
Cate Street and Thermogen have been working to develop the pellet mill since late 2011. A bankruptcy of GNP’s East Millinocket mill, a changing out of the pellet-manufacturing technology the Thermogen project would employ, and the need to resubmit permit applications are among the reasons the project has yet to break ground.
The Maine Department of Environmental Protection’s review of Thermogen’s air-quality permit is ongoing. It should finish within three months, if not sooner, said Karl Wilkins, DEP’s spokesman.
Thermogen was due for $16 million in bond financing through a major business expansion program offered by the Finance Authority of Maine in April 2014, but opted to not collect. Enough time has passed to force FAME to require Thermogen to make a new application if the company wanted financing, said Bill Norbert, FAME’s spokesman.
The overdue $120,000 tax payment to Millinocket came in two installments on Feb. 27, Daigle said.
“They are the biggest taxpayer in the town. Anything they pay helps keep our cash balance on the plus side because they are the biggest piece of the puzzle. Next year they won’t be,” Daigle said.